Polaris Minerals Corporation (PLS)

The first edition of The Financial Passage Maker (2007) presented a commentary on this company. 

My reasons for investing in the company were simple:

• a large resource of high quality aggregate to supply the "high end" of the market for aggregates
• agreements in place with local First Nations to ensure community support
• a strategic location which has the strategic advantage of low cost marine transport to large markets along the west coast of Canada and the U.S.
• the difficulty of opening new quarries in areas where it may be economically feasible to transport materials to markets served (or potentially to be served) by Polaris. 

The stock went into the proverbial pits as a result of various factors, including:

• the meltdown of the U.S. housing market
• financial difficulties on the part of cash-strapped, overextended state governments
• fear on the part of short to intermediate term investors. 

I bemoaned this state of affairs as I experienced a 90 percent loss on my position. However, I held on in the belief that I could, at the very least, eventually recoup a substantial part of my original investment.  My reasoning for holding the position never changed.  

In fact, I added substantially to my position when the stock price fell to $0.67 a share.  The valuation was too attractive,  even considering the potential for a dilution of stock as a result of the company's efforts to obtain new financing.  I am now almost "even" as a result of the follow-on purchase.  The share price is now valued at $1.89.  

http://www.polarmin.com/news/release?id=1020

If this news release is to be believed, the company is now debt free. The prospects of an increase in demand for its products should make future financing much easier than in the past, albeit at the risk of further dilution of its shares.  

The resurgence of the construction market in the U.S., coupled with an improvement in California's fiscal state has reawakened an interest in aggregate plays on the part of investors:

http://resourceinvestingnews.com/54060-opportunities-juniors-aggregate-highbank-sand-stone-gravel.html

You can expect more articles of this nature in the future.  I anticipate that the share price will increase .... it's been a long wait. It may yet be a case of delayed gratification writ large.   

Recently, I have been exploring potential investments in the "high end" of the aggregates market; namely, cement companies which focus on the commercial construction.  I have yet to find a compelling company, although there is one which has "turned the corner" and is now profitable.  To my mind, investing in aggregates makes a lot of sense, especially as there are few alternatives which are cost effective and accepted widely by the community.  At some point, when the cost of aggregates increases substantially, it might be worth investigating alternative sources/technologies ... but not yet.  The industry is inherently very conservative: regulations change at a glacial pace; and, many companies are risk averse, especially during these early days of the economic recovery.